How Blockchain Technology is Transforming Supply Chain Management in 2024
By Matthew Van Niekerk, Co-Founder of SettleMint, the leading Blockchain Transformation Platform
Imagine being able to trace your products — coffee beans, locally-made crafts, or materials sourced from a specific area — from point of origin to your storefront, with real-time information on a distributed, transparent ledger that can't be altered. Not only could it increase your confidence that your products are coming from the right place, it can increase customer confidence as well.
This is the reality organizations are already seeing when using blockchain in their supply chain management. Blockchain’s benefits are many and it has the potential to create $3.1 trillion in new business value by 2025. In fact, 97% of business leaders believe they’ll lose competitive advantages if they don’t integrate blockchain into their operations.
However, according to the respondents in our "State of Blockchain Transformation in Supply Chain" report, one of the biggest barriers to starting blockchain experimentation is not knowing which use cases to begin with, or how to put a plan in place to develop, launch, and scale blockchain projects. If you're looking to implement successful blockchain projects to improve your supply chain management in 2024, here are the top use cases you can turn to and four ways to find success.
Six Supply Chain Use Cases for Blockchain
Blockchain brings a number of enhancements and improvements to supply chain management, like better security, privacy, transparency, and trust. In our report, respondents believe blockchain has the highest potential to transform the following:
1. ESG Reporting and Monitoring: With more companies increasing their focus on Environmental, Social, and Governance (ESG) initiatives, blockchain has the highest potential to transform ESG tracking and reporting because of its tamper-proof, transparent, and immutable ledger — especially helpful when 94% of executives feel pressured to prioritize ESG initiatives.
2. Data Sharing and Interoperability: Blockchain also has a high potential for enhancing secure data exchange through its decentralized, distributed platform that removes intermediaries.
3. Streamlined Payments: Blockchain can transform supply chains by facilitating faster, more secure transactions, especially between different countries, as well as through self-executable smart contracts.
4. Real-Time Tracking and IoT Integration: In addition to more accurate tracking through its immutable ledger, IoT devices along the supply chain can send data updates to that ledger, locking in accurate, real-time tracking.
5. Provenance Tracking: Blockchain's ledger allows supply chain companies and end users to see the origin of the product, ensuring its authenticity — a big advantage for those sourcing sustainable or local goods.
6. Quality Assurance and Compliance: With its ability to record provenance and real-time tracking across the supply chain, blockchain's immutable, transparent ledger can assist in quality control and can demonstrate compliance as well.
To determine which use cases are best for your supply chain management initiatives, identify projects that will demonstrate value and ROI quickly. Blockchain projects excel where multiple parties can benefit from sharing data, but where those parties face a barrier to coordination, like the inability to trust each other — which makes supply chain management a perfect area in which to experiment. Identifying these use cases can help you kickstart your greater Blockchain Transformation strategy.
Six Steps to Blockchain Transformation Success
Respondents to our report believe they'll find more success in their future blockchain endeavors by focusing on the following areas: increased expertise in blockchain, larget budgets and leadership buy-in, stronger partnerships with blockchain vendors, and real-world testing and prototyping. Here are six steps to get started with a Blockchain Transformation today.
Step 1: Define your Blockchain Transformation ambition and strategy
Blockchain Transformation requires a mindset shift across your organization’s processes, people, and technology. This is why the first step in your implementation is to assess your company's maturity and readiness to embark upon a Blockchain Transformation. Determine your objectives as well so that you know what goals you'll move towards.
Step 2: Design your blockchain initiatives
Next, determine what new initiatives, business models, or revenue streams you’re after, ensuring that customer and constituent needs are at the center of your efforts. Look to the latest blockchains developments in the market and leverage best practices already out there.
Step 3: Identify relevant use cases and define KPIs
Next, identify your use cases, which could be one of the above. Start with initiatives that can get you to initial success, value, and ROI quickly. Be sure to pick the key performance indicators (KPIs) you’ll use to measure how your efforts generate a positive ROI.
Step 4: Build a team with different key stakeholders according to the use case
Next, build your Blockchain Transformation team, and included front end developers, UI developers, industry experts, project managers, and others. While demand for blockchain programming skills grew 552% in 2022, individuals with that expertise are still scarce, so include upskilling your own teams on blockchain as part of your strategy. Turn to blockchain vendors and partners, as well as any internal blockchain champions, to assist with this training.
Step 5: Invest in a Blockchain Transformation Platform
On the technology side, invest in a Blockchain Transformation Platform. With a variety of templates, customizable code libraries, integration assistance, and other features, these platforms can abstract much of the complexity so that developers can start creating new blockchain applications to improve your supply chain management.
Step 6: Deliver your blockchain project, scale it, and refine it
Finally, launch your blockchain project, using the metrics and KPIs you determined at the start to measure its success. As with any new technology, adoption may be an ongoing process, especially when onboarding multiple entities across the supply chain. Don’t launch and be done with it, but continue to iterate and update your project, knowing that Blockchain Transformation is a journey, not a destination.
Tame Supply Chain Management in 2024
Being able to trace your products from point of origin to your storefront can be a reality. But blockchain project success will only come if you focus on increased blockchain awareness and education, getting leadership buy-in, building stronger partnerships, and testing, testing, testing. Increase supply chain visibility, be prepared for disruptions, and improve your reporting by integrating blockchain into your supply chain management in 2024.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.